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On the fast track

Business

The ongoing financial downturn has not stopped Bombardier from opening its new manufacturing facility in India. Niranjan Mudholkar finds out the reason

The inauguration of Bombardier’s new railway vehicle manufacturing facility in India at Savli in Vadodara, Gujarat, has put the company on the fast track in India’s infrastructural journey. It will further strengthen the company’s presence in the region, where it has been active for nearly 35 years. The move will also allow it to cater to the growing South East Asian market.

Interestingly, Bombardier’s chairman Laurent Beaudoin said that the company had no intentions of stopping here. “We are open to similar initiatives as opportunities arise,” he said.

One big opportunity on the Indian horizon is of course the second metro project in Mumbai. “Bombardier Transportation is amongst the shortlisted consortiums bidding for this project along with its partners GVK and Yeoh Tiong Lay of Malaysia. The bid is expected to go through the next phase shortly,” said Rajeev Jyoti, managing director, India, Bombardier Transportation. If Bombardier wins the bid, it is likely that the new facility may play a role, although Jyoti declined to comment on it.

Nevertheless, Bombardier has a strong hold in the Indian market with Indian Railways being one of its its biggest customers. The reason why Bombardier India is unfazed by the current economic crunch. “The downturn has had no impact as far as our offerings are concerned. We will continue to manufacture as per their budgets – in terms of locomotives and other components. So far the crisis has not impacted us and we do not expect it to in the next 6-8 months as far as IR and their orders are concerned,” Jyoti informed.

The Delhi Metro Rail Corporation (DMRC) is another key client for Bombardier. The Savli plant’s first order for 424 Bombardier Movia metro cars is from DMRC. Of this, 36 cars will be manufactured in Germany to ensure a successful technology transfer; the remaining 388 metro cars will be produced in India. “As far as metro projects are concerned, projects like DMRC are externally funded by the Japanese – and we do not foresee an impact on our current order book. All that we do is based on firm orders/projects on hand and hence there is nothing that is left to anticipation,” Jyoti said.

“We will meet expectations by delivering our reliable and energy efficient Movia metro cars on time,” said Stephane Rambaud Measson, president, passengers division, Bombardier Transportation.

Bombardier India is also closely watching public private participation projects on their financial closure. “We believe there will be developers supported by domestic financial institutions, who will make this happen,” Jyoti added. Besides catering to the Indian clients, the Savli facility will also be utilised for exporting to South East Asian countries like Singapore and Thailand. So far, it has been utilising its Chinese units for the same. “As of now, we do not anticipate anything disturbing in terms of our global exposure,” Jyoti added.

“The Savli plant will be the first large-scale rolling stock and bogies manufacturing site in India that is fully-owned by a foreign multinational company,” Jyoti said. Built in a record time of 18 months by Shapoorji Pallonji Co. & Ltd (civil construction work), the plant is expected to deliver the first railway cars by March 2009.

Bombardier’s state-of-the-art Indian plant is based on a transfer of technology from its Gorlitz plant in Germany.

By using spot-welding robots, the Savli plant will make Bombardier the first railway company in India to use robotic welding technology for carbody manufacturing.

“Given all other production and engineering activities such as the propulsion systems manufacturing site and the signalling systems software engineering centre, Vadodara becomes the only city in the world equipped to deliver all key electrical and mechanical components for the manufacturing of railway vehicles,” Jyoti remarked.

Bombardier has invested 33 million Euros (Rs21 crore) in its Indian plant through internal accruals. Headed by site manager Pierre St-Onge, the plant will manufacture 24 coaches per month initially. “After the ramping up process of the plant takes place, it will produce 32 coaches per month,” Jyoti said.

The facility has directly generated 750 new jobs through Bombardier’s newly trained staff and is expected to generate another 3000+ jobs in the region.

Although the raw material for the Savli plant will be sourced from across the world, certain electrical components like transformers, traction motors, converters, filter and contactor boxes will be sourced from local vendors.

“Certain components will be sourced from Sweden and subsequently from our Vadodara site.

However, Bombardier Transportation will try to source its raw materials locally as much as possible,” Jyoti said. Bombardier’s vendors too are likely to follow a similar structure – where they will initially source components from abroad and subsequently start to locally manufacture the same.

Bombardier’s first plant in India

Location: Savli in Vadodara (Gujarat)
Investment: 33 million Euros (Rs21 crore)
Purpose: Making stainless steel carbody, bogie manufacturing and final assembly activities
Initial capacity: 24 coaches per month
Capacity after ramp up: 32 coaches per month
First delivery: March 2009
Number of jobs created: 750 (direct) + 3000 (indirect)
Technological innovation: Use of spot-welding robots

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